I wonder if they would use the setting in Iceland for some establishing shots and do more of the fight on a soundstage.

very possibly. certainly if it contains everything that I have listed above then it would seem they should have more filming to do than just a couple days in Iceland working on it.

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I was going to comment on the idea of Algrim changing to Kurse off-camera, but in thinking about it some more, I think they still will show it. It's too important to the story, it would add to the overall spectacle, and would feel like a deus ex machina if someone is just explaining it later: "Oh, that used to be Algrim, but now it's Kurse. Srsly."